Business Context and Reporting Period
This Form 8-K filing by Pavmed Inc. (an emerging growth company) reports a corporate event dated June 6, 2019. The filing addresses a voluntary adjustment to the terms of a Senior Secured Convertible Note issued in December 2018.
Key Financial Metrics
The filing does not provide comprehensive financial statements, revenue, profit, or cash flow data. Specific debt and liquidity metrics related to the convertible note are as follows:
- Convertible Note Principal: $7,750,000 (initial amount issued December 27, 2018).
- Initial Conversion Price: $1.60 per share.
- Historical Conversions: During prior adjustment periods (March 2019 to June 4, 2019), the holder converted $624,000 in principal and interest into 578,676 shares of common stock.
Material Changes
Effective June 6, 2019, the Company elected to reduce the conversion price of the outstanding Convertible Note for a limited period:
- Adjustment Period: June 6, 2019, through June 26, 2019.
- New Conversion Price: Reduced from $1.60 to the greater of (i) $1.00 or (ii) 85% of the closing sale price of the common stock on the most recent trading day (recalculated daily).
- Conversion Cap: The holder may not convert more than 2,000,000 shares at this reduced price.
- Reversion: After the Adjustment Period or upon conversion of 2,000,000 shares, the price reverts to $1.60 per share.
Guidance, Outlook, and Risks
The filing contains no forward-looking guidance, revenue outlook, or management commentary regarding future operations. The primary contingency noted is the potential dilution of existing shareholders if the note holder exercises the option to convert up to 2,000,000 additional shares at the reduced price during the Adjustment Period.
Investor Verification Checklist
- Verify the current outstanding principal balance of the $7,750,000 Convertible Note after the $624,000 previously converted.
- Monitor the daily closing stock price during the Adjustment Period (June 6–26, 2019) to determine the effective conversion price.
- Assess the potential dilution impact of converting up to 2,000,000 shares at the reduced price.
- Confirm whether the Company has elected to use the extended transition period for new accounting standards as an emerging growth company (filing indicates this was not elected).